The skills supply chain must change as software eats the world

The observation that “software is eating the world” has become a truism. Venture capitalist Marc Andreessen was early when he made his famous quip in 2011, but now most people get the drift. Digital technologies are transforming the design, development, and delivery of everything from movies to manufacturing to ride-sharing.

However, not enough has been said about what software means for workforce development. Waves of tech have been radically changing what workers do, yet neither the workforce system nor company human resource departments have adequately responded.

With digital technologies transforming firms’ talent needs, employers continue to say they are struggling to locate not just high-skill software and data professionals, but also digitally-literate line workers. At the same time, universities, community colleges, and career technical education programs struggle to keep up. Much remains in flux, both on the supply and on the demand side of the talent equation.

Which is why the Metro Program, in partnership with Kettering University and the Mott Foundation, convened its latest advanced industries regional workshop last month in Flint, Mich., at Kettering, one of the nation’s earliest bastions of highly applied, experiential engineering education.

At Kettering, Brookings brought together two dozen industry executives, entrepreneurs, educators, training-system officials, and economic development people to tour Kettering’s hands-on learning labs; discuss developments in “digitization” with a focus on Michigan’s increasingly high-tech auto sector; and explore a variety of training-system responses to the talent needs of industry. Much ferment surfaced during the day’s discussions, but by day’s end a short list of key insights came to mind.

Here are five takeaways:

Software really is changing everything. The feeling in the room at Kettering was that the immediate and long-term implications of digitization for skills acquisition are more, not less, profound than typically assumed. “It says something” that the second largest exhibition booth at the recent Hannover Messe in Germany, the world’s largest trade fair for industrial technology, was occupied “by Microsoft, a software company, not an industrial company,” observed Helmuth Ludwig, the chief digital officer of Siemens PLM Software, at lunch. And from there Brookings and several industry speakers listed more indicators of change. Brookings Research Analyst Siddharth Kulkarni discussed forthcoming research that quantifies the rapid spread of computer and electronics knowledge through essentially all industries in the last decade. (Since 2010, more software and computer jobs than mechanical engineering jobs have been posted in the Michigan manufacturing sector!) And Raj Nair (pictured), the chief technical officer of Ford Motor Co., put a finer point on it. Alluding to Brookings data that reported that 40 percent of the cost of a new vehicle now consists of electronics and software content, Nair noted that some 10 million lines of code in the Ford Hybrid Fusion process 25 gigabytes of data in an hour. “You can’t be a mechanical engineer without knowing software today,” noted Nair, “and because 95 percent of the manufacturing process is automated, the people who work on the line are also highly trained technicians.”

“Hard skills” are critical, and digitization has created genuine supply and demand challenges. To be sure, economists continue to debate whether major skills gaps exist in the aggregate economy (given that wages have barely increased). However, the employers and training providers gathered last month had no doubt that filling specific roles requiring specific skills is often difficult, and nowhere more so than in the digital space. On this front, several attendees attested to the fact that strong industry demand and limited historical production of STEM and tech skills in Michigan has created very real demand and supply tensions focused on specific “hard skills” such as software development, computer systems analysis, programming, and database administration. In step with Brookings data, the workshop participants lamented that in-demand skillsets are the hardest to obtain in Michigan and stressed the need for better “block-and-tackling” to produce them. David Milbourne, Alcoa’s vice president for talent management, spoke of the company’s need for specific hard skills in computing, math, additive manufacturing, measurement, and materials science. Mary Gustanski, vice president of engineering and program management at Delphi Automotive Systems, described Delphi’s need for and difficulty in finding more applied and “less theoretical” software engineers. And Dennis Dio Parker of Toyota Engineering and Manufacturing alluded to Toyota’s insistence “for competitive reasons” that every factory floor worker possess a specific “technical core” of professional competencies, including in electronics, robotics controls, circuitry, and digital learning. “We have to focus in detail on exactly what’s needed in talent coming into the company and whether potential workers have it,” said Parker. “I will say we are having a difficult time procuring the talent we need because, first, there’s not enough of it now and second, we need that talent to be more talented, with more specific skills.”

“Soft skills” are a problem too—and aren’t just about showing up for work. Frequently the soft-skill discussion among industrial companies sticks mostly to basics like attendance and initiative. At Kettering, though, the fact that the manufacturers in the room saw their companies in part as software companies elevated the soft-skill conversation. Nair noted that digitized auto products require “a lot more coordination and cross-domain teamwork” across technologies and disciplines than traditional old-line manufacturing. Robert Vogt, the chief technology officer of Voyomotive, LLC, an app-based connected-car company, stressed the need for “passionate” developers rather than perfectly trained engineers who “keep one eye on the clock all day.” And Milbourne talked about seeking the “innovator’s mindset” in hires—not just a feel for teamwork and communication but also for creativity. “We are really asking ourselves, `How do you get from the model T to the F-150?’” Milbourne said, adding that “it’s a huge question for us, `How do you get that innovator’s mindset into the company’s DNA?’” Milbourne believes new technologies require more and different types of coordination and a greater degree of creativity in workers.

Confronted by these issues the nation’s advanced industries talent supply chain is being challenged to deliver new kinds of value in new ways—and so it has entered a period of flux and experimentation. In this regard, several of the workforce system leaders in attendance acknowledged that the process of educating and training individuals and then connecting them to the world of work has not evolved to the same degree that technology has transformed firms and industries. They acknowledged that universities and community colleges have struggled to keep up the skills and competencies digitizing employers need in part because there are still too few industry-college training partnerships. And yet, as Kettering President Robert McMahan observed: “Numerous models are being tested and numerous experiments are underway.” In that regard, Kettering University itself stands as a timely model to the new needs. McMahan described how Kettering has leveraged industry ties to link rigorous technical training to interlocking experiential learning through the school’s well-known co-op model. “Kettering couples theory and practice right away—and very tightly,” McMahan said. More specifically, the afternoon panel of education and training leaders highlighted several models of tech-responsive training practice. Terri Sandu of Lorain Community College in Northeastern Ohio described how Lorain has sought to immerse itself in the local tech ecosystem by teaching in-demand skills and exposing students to the full range of needed skills, including entrepreneurship. Sandu noted that the college has created its own start-up accelerator, which serves the local economy and also gives students experience to the “entrepreneurial feel” of today’s tech-infused workforce. Parker, for his part, reviewed how Toyota led the design and scaling of a highly rigorous co-op and apprenticeship program for new workers in, first, one company (Toyota) in Louisville; then in multiple companies across the Louisville-Bluegress region; then in 85 companies across Kentucky; and then in 165 companies across eight states. By contrast, Will Brick, the general manager of TechShop Detroit, noted that “maker spaces” like his are breaking from convention to develop an improved talent pool, including by providing an unstructured “intake point” for “passionate tinkerers.” Brick related how TechShop not only has a relationship with Ford aimed at stimulating creativity among Ford workers, but that the public workshop helps connect creative amateurs to employers, thereby helping to locate talent with an innovator’s mindset. And finally, Paul Perkins, the president of Amatrol, Inc., a leader in competency oriented e-learning for technical skills, noted that high-quality interactive training—if tied to competency based credentialing—seems to resonate with young, internet-native workers “particularly if it incorporates elements of gaming and simulation.” Perkins believes competency based e-learning could facilitate tailored, “infinitely scalable” training. In short, the group gathered in Flint described a moment of proliferating, productive experimentation in the training systems, coinciding with a moment of flux within firms. Or as observed Mike Hogan, the associate dean of STEM programs at Central Piedmont Community College in North Carolina: “Companies are still figuring out what digitization or Industry 4.0 means for them and we need to work with them.”

For all of the one-off experiments there’s a huge need to scale them. Ultimately, the promising individual models on display in Flint—while encouraging—also prompted frustration. How will the sound responses coming into focus be scaled to equal the nation’s massive, increasingly digital talent needs? In this vein, Allyson Knox, the director of education policy and programs at Microsoft, silenced the room by asking how many students the group thought took the Advanced Placement computer science exam last year in Michigan and then supplied the answer: only 900, including only 20 Hispanics, 16 African Americans, and 110 girls. To Knox those stark numbers implied the kind of response needed. Noting that only 71 (out of 1,575) high schools in Michigan offer an AP science course, Knox declared:“[We should] find one big thing and see if we can move the dial on it” and nominated a national scale up of computer science training in high school. Shortly after Knox’s proposal, other workshop participants suggested other routes to more systemic scaling. Elaina Farnsworth, the CEO of Mobile Comply, a workforce training and credentialing firm in the “new mobility” industry, called for stronger regional collaboration efforts aimed at creating industry relevant training pathways. And Brookings Vice President Amy Liu alluded to promising industry-educator cluster initiatives in various regions and suggested they be multiplied. She and others seemed to be asking about how to resolve a colossal set of collective-action problems that plague the education and training worlds.

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In the end, the discussion at Kettering clarified that the “software-ization” of the advanced industry sector is beginning to generate exciting responses across the worker-training community. The question now is: How can those responses be scaled? How can they become ubiquitous?

The Alcoa Foundation is a donor to the Brookings Institution. The findings, interpretations, and conclusions posted in this piece are solely those of the author and not determined by any donation.